Nouriel Roubini: Paulson Plan is a Disgrace
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Inquiring minds are interested in Nouriel Roubini's thoughts on the Paulson Plan. Please consider the RGE Conference Call on the Economic and Financial Outlook..and why the Treasury TARP bailout is flawed.
The Treasury plan (even in its current version agreed with Congress) is very poorly conceived and does not contain many of the key elements of a sound and efficient and fair rescue plan. Like in my 10 step HOME plan many other economists and commentators (Charles Calomiris, Raghu Rajan, Kotlikoff and Mehrling, Luigi Zingales, Martin Wolf, Barry Ritholtz, Chris Whalen and twenty others whose views have been featured this week in the RGE Monitor group blogs) have presented ideas that would have minimized the cost to the US taxpayer of a resolution of this financial crisis. It is a disgrace that no professional economist was consulted by Congress or invited to present his/her views at the Congressional hearings on the Treasury rescue plan.Former FDIC Chairman Doubts Bailout Plan Will 'Work' in Current Form
Specifically, the Treasury plan does not formally provide senior preferred shares for the government in exchange for the government purchase of the toxic/illiquid assets of the financial institutions; so this rescue plan is a huge and massive bailout of the shareholders and the unsecured creditors of the firms; with $700 billion of taxpayer money the pockets of reckless bankers and investors have been made fatter under the fake argument that bailing out Wall Street was necessary to rescue Main Street from a severe recession.
The Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown.
Bloomberg is reporting Isaac Doubts Bailout Plan Will 'Work' in Current Form: Audio.
Sept. 25 (Bloomberg) -- William Isaac, former chairman of the Federal Deposit Insurance Corp., talks with Bloomberg's Tom Keene from Sarasota, Florida, about the U.S. financial crisis, fair-value accounting rules and the government's proposed $700 bailout of financial institutions. (Source: Bloomberg)OK We Have A New Theme
00:00 1980s financial crisis as "far worse"
02:26 Fair-value accounting rules; 1980s turmoil
09:55 "I don't think" $700 billion plan will pass
10:23 FDIC funds, premiums; rescue plan amendments
15:13 Government role in crisis; crisis solutions
22:51 Timing of rescue plan; outlook for bailout
Get Faxing And Calling!
Note: They are working all weekend to ram this down our throats.
We must work all weekend to stop it.
THIS IS CRITICAL: Please fax AND phone your congressman.
Call them with this simple message "If you vote for this bill, you will lose my vote".
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Sen. Richard Shelby (R) 202-224-3416 or 202-224-5137 (try both not sure which is correct)
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Sen. Daniel Inouye 202-224-6747
Sen. Hillary Clinton 202-228-0282
Those inclined should also fax their own senators as well.
Please send this email to 10 others and have them do the same.
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We can STILL make a difference.
Ongoing Campaigns
Please act on ALL of the following.
Every Fax Counts! Do your share!
Fate May Rest With Shelby
Another Mad Rush To Judgment
Senator Sanders' Petition Against Paulson
Fax Now!
Call Now!
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Fax Title US Leading Economist Nouriel Roubini Says "Paulson Plan is a Disgrace"
Sample Fax
Dear Senator/Congressional LeaderIf you do not have internet faxing get it.
The Paulson plan is not workable. It is a sellout to corporate America at taxpayer expense.
Nouriel Roubini: "Paulson Plan is a Disgrace"
On Friday, Nouriel Roubini, the most widely respected economist in the country stated...
"The Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown."
Former FDIC Chairman Weighs In
"Bailout Plan Will Not 'Work' in Current Form"
Mad Rush To Financial Judgment
On Friday we heard president Bush and Paulson, preach the same set of lies they have preached before.
- There can be no delay.
- Sweeping new Powers for the Fed are needed.
- The Treasury needs $700 billion dollars.
- There is no time to study alternatives.
In your heart you know all of the above are lies. It was the very same mad rush to judgment that started the Iraq War. We do not need and cannot afford a financial mad rush to judgment.
Thee odds of failure on the Paulson plan are 100%. The Paulson plan will not create any jobs or help homeowners pay their bills. Instead it diverts $700 billion of taxpayer funds to failed banks that took excessive risks. The sheer size of the bailout will cause interest rates to rise, further adding to taxpayer woes.
Long term interest rates are already up a half point on news of this bill. They will rise more if it passes. How is that supposed to help homeowners?
Robbing taxpayers to pay failed banks cannot possibly work!
Printing money and giving it away cannot work either. If it did work, Zimbabwe would be the most prosperous nation in the world.
190+ Economists Slam Bailout
Over 190 top economists in the country have slammed this bailout on grounds of fairness, ambiguity, and long term effects.
http://faculty.chicagogsb.edu/john.cochrane/research/Papers/mortgage_protest.htm
Paul O'Neil Is Against The Plan
Former Treasury Secretary Paul O'Neill said today that our nation's leaders -- especially President Bush -- are "in a panic" and haven't thought through the $700 billion bailout plan in a rush to pass it by the end of the week.
"I don't think he understands or knows much about any of this and it shows. It is possible to re-liquefy the credit system without 'We the People' owning $700 billion worth of homes," he said.
BB&T Corp. Chief Executive Officer John Allison critiques the plan
Treasury "is totally dominated by Wall Street investment bankers" and "cannot be relied on to objectively assess" the impact of government policy on the financial industry, Allison wrote in a Sept. 23 letter to Congress.
The letter was verified by Bob Denham, a spokesman for BB&T, North Carolina's third-largest bank.
- What is it that Paulson knows that 190+ economists don't?
- What is it that Paulson knows that William Isaac, former chairman of the Federal Deposit Insurance Corp. does not know?
- What is it that Paulson knows that former Treasury Secretary O'Neil does not know?
- What is it that Paulson knows that small bank CEOs who avoided this mess do not know?
- What is it that Paulson knows that Roubini does not know?
Remember it was Paulson who was telling us all how safe the US Banking system was just a few weeks ago.
Roubini: "It is a disgrace that no professional economist was consulted by Congress or invited to present his/her views at the Congressional hearings on the Treasury rescue plan."
Block This Bill
Our prayers are with you that you have the courage to stand up do what you know you must do: Block This Bill.
I cannot and will not vote for any member of Congress who votes for this bill in its current form or anything remotely close to the current form.
This insane rush to push something through, is wrong. If you vote for this bill, you will not get my vote in the next election. It is as simple as that.
It is time to scrap the Paulson Plan and start all over. Doing nothing is far better than wasting $700 billion in a Wall Street Bailout Boondoggle that puts an already stressed taxpayer in further jeopardy.
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I went with MetroFax. 1000 pages at a very cheap price.
If you are reading this most likely you can afford $12.
Sign up today and fax to your heart's content.
Be a part of history!
A grass roots campaign like this has never killed a major bill. You can help do it.
Flood them with calls, emails, and faxes.
Just Do It!
It is time to Take Back America from Wall Street and return a piece of the pie to Main Street USA.
Focus On Shelby Once Again
In addition to the above, we need to focus on Senator Shelby once again.
Please use Fate May Rest With Shelby as your guide.
Two More Campaigns.
Please repeat them all weekend.
Thanks.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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